Graduate School, 1959–6

As already explained, to be assured of an academic career in Britain in the late 1950s required not a doctorate but a First-class Bachelor’s degree. But it was not to be presumed; so I took out some insurance by applying to two US graduate schools, Stanford and Princeton, after speaking with Maurice (now Lord) Peston who had recently returned from Princeton. Both schools accepted me and I was obliged to choose between them before the B.Sc.Econ. results were posted. I got my First and along with it the Gonner Prize (which included volume 2 of Sraffa’s Ricardo) and a University Postgraduate Scholarship. But I was advised to take advantage of a Fulbright Travel Award and follow up the Princeton opportunity for some formal training. I took the advice, though with no real idea of what this would entail. Certainly it was not then our intention to spend four years away from Europe. One of my reasons for selecting Princeton over Stanford was the presence there of Jacob Viner, whose retirement had been delayed. His course was, as one would expect, first rate, and I still find his notes valuable. But it was necessary not to allow oneself to be intimidated by him. His first question on meeting me was: ‘Who was Hardy Canute?’ And he strongly asserted (quite inexplicably) that there are no biological analogies in Alfred Marshall’s work. He was also intolerant when it came to Marx, whose writings on value he likened to the ink splatterings made by a monkey. But I am privileged to have studied with the author of Studies in the Theory of International Trade, which is surely one of the finest works in doctrinal history ever written.

At the time of my arrival in Princeton there were no formal courses in mathematical economics. I made arrangements with Harold Kuhn, who helped me with Robert Dorfman, Paul Samuelson and Robert Solow; and I used James Henderson’s and Richard Quandt’s text assiduously. (Quandt was my personal advisor and I am indebted to him for his encouragement.) But it was clear to all, and especially to myself as I had suspected since age five – a school report dated July 1942 mentions that ‘Samuel became over-anxious regarding number-work’ but errs by adding that ‘now he derives much pleasure from this subject’ – that I was not cut out to be a mathematical economist.

The choice of dissertation was particularly difficult. I had not intended to proceed to a doctorate at Princeton. The issue did not arise until after the comprehensive examinations, when I indicated to William Baumol, who had kept a kindly eye on me since my arrival, that my wife and I (by then we also had a daughter) planned to return to Britain. He dissuaded me, and I found myself faced with the choice of proceeding either to research in the history of economic thought with little formal supervision – Viner had by then retired – and also no clearly defined project, only a vague wish to write on the British classics, or to some alternative. Fritz Machlup, who had come from Johns Hopkins to succeed Viner, provided the solution. He was then organizing an army of graduate students in a project financed by the Ford Foundation on the economics of innovation. For him a dissertation was one further hurdle to overcome on the way to the doctorate in no more than two years, certainly not one’s magnum opus. I followed his advice to undertake one of the forty-odd studies he had listed; and not being really interested in any of them I selected the first: Investment and Innovation. It proved to be an inspired choice.

At the very outset of my investigation an extraordinary offer by the DuPont Company gave me access to some thirty years of detailed cost and investment data relating to rayon manufacture at several of their North American plants, and also to the scientists and officers who had been engaged in decision-making over that period. I do not recall by what persuasive arguments I convinced DuPont to yield up materials of this richness to an outsider. I was also able to obtain supplementary information from suppliers of materials and equipment. Many days were devoted in the New York Public Library to the Rayon Textile Monthly and Chemical Industries and such like; and I made frequent trips to Wilmington, Delaware (DuPont’s head office) and to the homes of active and retired informants, several of whom showed great kindness to my small family. The wealth of data and information and the acquired knowledge of the production process allowed me to measure the impact of innovation – distinguishing between ‘major’ and ‘minor’ categories – on productivity improvement, to evaluate the degree of capital embodiment required and the extent of patent protection, and to treat related issues in the economics of innovation. The thesis was published with only minor revisions by the MIT Press (Hollander 1965) and to this day is regularly referred to in the widest range of journals.

At the time it pleased me to know that both Adam Smith and Alfred Marshall would have approved of the exercise. And with this single venture into Industrial Organization I obtained my licence to devote the rest of my life to the history of economics. The exercise was of permanent value in other respects too. I had dirtied my hands with real economics; and I was made suspicious of the one-sided Popperian perception of scientific activity with its neglect of the inductive dimension.^vi